Thailand’s central bank has said it is closely monitoring the baht and stands ready to manage any excessive moves in the currency, which hit its weakest level in nearly 16 years.
The baht hit a level of 37 to the U.S. dollar on Friday, the weakest since December 2006. It has weakened about 10% against the greenback so far this year.
The Bank of Thailand (BOT) said in a text message to reporters that the baht is more volatile due mainly to external factors, including expectations of more aggressive U.S interest rises and deteriorating risk sentiment in emerging Asian markets after China’s yuan had fallen below 7 per dollar.
Assistant Governor Alisara Mahasandana said in the statement that there was also a specific factor for Thailand due to falling gold prices, resulting in more dollar buying by gold companies.
She said, “The BOT is closely monitoring the movement of the baht and is ready to take action when the baht moves in an unusually volatile way in order not to affect the adjustment of the real economy.”
The assistant governor further noted that the currency tended to become more volatile, particularly when it depreciated past the 37 baht to the dollar level.
She added that the BOT also urged businesses to manage risks to mitigate the effects of high financial market volatility. (NNT)
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